Yeah, so this isn't about gambling addiction but I couldn't resist the use of the headline on everyone's favorite in-casino pamphlet.
Jeff's back with the latest installment of his column and this time around, it's looking at a common thread in recent casino corp conference calls: a reduction in comps to rated players.
The article is after the jump.
Sheldon Adelson was more clear last week during his company's quarterly conference call describing how his Las Vegas properties had reduced comps. His previous description of the new policy made it sound like he had eliminated comps except for all but the biggest players ("We know that the subject of comps has been played out all across Las Vegas, but we've taken a different position. We've essentially cut out all our accounts except the most highly rated players," he said in February). I then wrote a column that said the decision was a mistake, if in fact that was what Las Vegas Sands was doing.
"I'm not going to say that Las Vegas Sands is crazy to say the company is going to stop giving complimentary rooms, meals and other perks to all but the biggest gamblers at its Venetian and Palazzo casinos, but I will say that, if they follow through, I think it is a short-sighted, stupid move," is what I wrote.
I also said that I questioned whether Sands bosses would really do what they said they said they were doing.
"Now, I should note right here that I'm skeptical about Sands' follow-through on its announced move," I wrote. "Will its hosts really tell a customer who just dropped $5,000 over a weekend, playing 12 hours of blackjack at more than $100 per hand, that they won't pick up the tab for his room or at least a couple of meals? That's where the rubber meets the road on the new policy: When gamblers' expectations (for reasonable comps) aren't met and those folks never return -- and when they spread the word. And will Sands really stop giving players comps for their accumulated slot points? I am dubious."
As it turns out I was right to be skeptical. Sands executives said last week that the company had significantly reduced the number of comped rooms Venetian and Palazzo had given out during the quarter, but Adelson said during the call that the reduction in comps mainly affected slot players at the lowest levels of play.
That's significantly different from what he said three months earlier. Sands may be stingier with comps than its biggest Strip competitors, but I believe what's really going on is a sensible industry trend. Sands is not eliminating comps given for folks who have significant play. Instead, I believe the real change is that operators are backing away from the incredibly generous levels of comped offers made to players in their databases in 2009 and 2010 when they were doing whatever they could to keep rooms full.
MGM Resorts CEO Jim Murren said as much during his company's call, noting that MGM was also benefiting from reduced promotional spend on the bottom levels of Mlife customers. I'm not a shareholder in any casino companies, but as a beneficiary of some of the wild promotional spending the major operators threw out during the bottom of the market, I think the operators are finally restoring sanity to their comp offers.
Ask any rated gambler what kind of offers they received from MGM, Sands and Caesars during those years, and almost everyone will say they received far more and better offers than their past play seemed to justify. I know I did. I spent so many weekends on the Strip, all at great properties, and all free. I haven't gambled much on the Strip since 2008 (and even before then, I was a green chip dice player unless I was really into the house's money) yet I received and used dozens of comped-stay offers for Venetian, Palazzo, Aria, Bellagio, MGM Grand, Caesars Palace and Mandalay Bay. Sometimes the offers included promotional chips, food and beverage credits and invitations to special events. I never thought that I would grow jaded by the resort experience, but during those years, I did. I did spend a few free weekends at some mid-level properties (Rio, Monte Carlo, Paris, Luxor and The Mirage) but, after a while, stopped accepting most of them, unless they had generous gambling or dining components. I almost never played during those visits (unless it was free chips or slot play or a tournament) and I expected the offers to quickly dry up, but they didn't, for two years. Only at the end of last year did they finally slow down. MGM Resorts made the most offers, but Caesars and Sands weren't far behind. (I've never stayed at Wynn or Encore and my limited play there has resulted in a couple of meal comps but never a room offer.) I'm sure many of the people who accepted the deluge of free room (and more) offers during the past two years proved to be valuable customers who spent enough money on the floor and elsewhere to justify the promotional spend that brought them in, but I know there were also plenty of folks whose spending was anemic (like mine was).
I've heard so many similar anecdotal reports from other players that they, too, were getting ridiculous numbers and levels of offers. Those kind of offers obviously weren't sustainable and it clearly is a smart move for operators to reduce free room and other offers as the market's strength returns. So while Sands may want to frame its reduced promotional spend as a sea change, maybe its reduced offers (and MGM's reduced promotional spending) are really more of a return to sanity, making offers and giving comps only to those whose play justifies them. I can't blame them if that's the case. It was fun (for me) while it lasted.
-- Jeff Simpson, May 2011